Moy Park on course for £1bn in sales

Posted on Tuesday 21 August 2012 byUlster Business

Moy Park's Nigel Dunlop with Ulster Business publisher James Greer

The agri-food industry is becoming an increasingly important pillar of the Northern Ireland economy, so it is perhaps no surprise to see the company that tops the 2012 Top 100 hailing from this sector.

Poultry processor Moy Park has expanded rapidly in recent years, acquiring the O’Kane Group in 2010 and gaining a strong market position in Ireland with its own brand of poultry products.

While the most recent figures officially available show the Craigavon-based company’s sales at £921m in 2010, Managing Director Nigel told Ulster Business that sales growth continued last year.

“We haven’t published the results yet but we had over one billion pounds in sales last year for the first time, which is a bit of a landmark for the business. I think that reflects good momentum in the business and we continue to see growth in the market place,” he said.

While Dunlop is rightly proud of the sales jump, he cautions that input cost inflation, for chicken feed, has also risen, indicating that the profit margins the business operates on may not have seen the same benefit.

“It is fair to say there have been challenges across the food sector with higher commodity prices – feed, wheat, soya, and so on over the last 12 to 18 months,” he said.

“The cost of feed goes up and because we are the sort of business that has to fight hard to maintain its margin, it is important to make sure that we can recover that in the marketplace. 2011 will have been a challenging year because of the hike in commodity prices.”

With farmers across Northern Ireland protesting recently that the supermarkets and big processors were paying unrealistically low prices, Dunlop says it won’t be aiming to recover costs by squeezing its farmers, as this would be detrimental to its supply chain.

“The farmers have to be able to have an income that allows their business to be sustainable and Moy Park has always been committed to working in partnership with our farmers to make sure that they can continue to provide for us on a long term basis,” he said.

“I think when you get farmers saying ‘we feel this isn’t a fair deal for us’ it is important people listen to that, because farming is the lifeblood of food companies and a very important sector to Northern Ireland. Above all we recognise it is not just about dealing with the short term it is about ensuring long term continued supply.”

Instead, the managing director says growth will come from a number of different opportunities, both through its core fresh poultry and its convenience food range.

With over 50% of households in Ireland now buying Moy Park’s own branded products and sales of chicken remaining high in the face of food inflation, the company is looking at expanding into a wider range of markets, particularly the UK. The company is partnering with celebrity chef Jamie Oliver on a line of chicken products and believes his association with high food standards will reflect well on the company. It has also brought in other chefs to help with innovation and new product development.

The other area of potential growth will come from being part of Marfrig Group, one of the world’s largest food companies, which bought Moy Park in 2008. It has a permanent presence in 22 countries and products that are sold in 140, and is one of the key sponsors of the football World Cup on home soil in Brazil in 2014.

Dunlop says that Moy Park may look at expanding its portfolio to align with other Marfrig products, and in particular may find opportunities as its parent company looks to develop Seara, a company it bought in 2009, into a global brand.

Moy Park’s own M&A radar remains on, but Nigel Dunlop says with Marfrig still bedding in a number of acquisitions around the world, its priority is to expand on what it has already got.

And as for being number one in the top 100?

“It’s lovely to be in that position,” he said. “It hopefully reflects our strong presence in Northern Ireland and the fact that we continue to be completely committed to growing the business and providing jobs in Northern Ireland.”